Some have argued that Renaissance Technologies, a highly successful and sophisticated hedge fund group, is artificially holding up the value of CRF in order to lend their shares at high interest rates to short sellers. It wouldn't take much for such a huge fund to prop up such a small CEF. But, if this is the case, then what happens to CRF and its shareholders if Renaissance decides not to prop this thing up anymore? Furthermore, (again, if this is the case) then might they be afraid of the regulatory consequences of such questionable activities now that the Galleon Group and its fraudulent activity have become front page news? Something to think about it...
I have been following and looking for more income/div stocks, reits, etc. I saw some of your posts at MAIN and was impressed, so I have been researching your recommendations and I like what you have written, Is it possible to talk with you over email? I am a commercial fisherman in Wa. state, just a regular guy looking for a good batch of income producers? I would appreciate some dialogue . Can u email me at email@example.com if you get a minute? Tks
"I'm not sure how the SEC would feel about a fund manager constantly talking up his positions."
Good point. I used to be a PM as well but decided to resign and trade independently about 18 months ago. It sure is nice not to have to deal with compliance constraints. Enjoy your profits from CRF -- a glass of champagne may be in order. Cheers to market efficiency.
Bearatologist, I have followed you for quite some time and enjoy your posts. Perhaps I was being a bit paranoid but I just have a hard time understanding why CRF and other closed end funds such as PHK and PGP have been able to carry such high premia for so long. I wouldn't know anything about the borrow costs of these names because I work through retail brokers and they never charge me anything (the downside is they hold zero inventory so shares are oftentimes unavailable if they don't happen to have other margin clients with long positions).
Admittedly, I may have been pulling straws in this case. That being said, I've been in this business long enough to know that market manipulation occurs regularly and people will do almost anything to make an extra buck (again, as exemplified by Galleon). I actually met with a couple of PMs from New Castle (then Bear Stearns) back in 2006 while conducting hedge fund due diligence for my former employer. Their returns were astonishing and yet inexplicable. I smelled a rat and avoided making an investment with them. I smell a rat again.